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Testimony: Bringing Budget Reform to Illinois

Hello, my name is Bruno Behrend and I'm testifying today wearing two hats. First, I am the State Director for FreedomWorks -- a think tank that integrates research with grassroots organizing to promote policies that empowers individuals. Second, I am the Executive Director of the Coalition for our Children's Future -- a Coalition of organizations working to prevent job-killing tax increases and save our public education system.

I'd like to thank you for providing this forum. It is my understanding that the goal here is to "discover what Illinois citizens are thinking about our state budget issues." Interestingly, my work with FreedomWorks has me traveling around the organizing grassroots support for good policy. This work has given me the opportunity to ask hundreds of citizens around the state about their concerns, and this seems a perfect forum to report to you about those concerns.

The citizens of Illinois are becoming increasingly frustrated by the apparent inability to control spending. This frustration is increased by the relentless push for tax increases and tax shifting schemes.

At the local level, municipal governments -- driven mostly by the voracious appetite of an education bureaucracy that gets great pay raises but provides a mediocre education at best -- are under continuous pressure to increase property taxes. At the state level, this same educational bureaucracy, combined with numerous other bureaucracies; which I affectionately call the "spending lobby"; are clamoring for a massive tax increase without even the slightest nod toward any spending restraint, financial reform, or one iota of accountability.

In the last few years Illinois companies; including big names like Motorola and small names too numerous to mention; have been forced to lay off workers and cut back spending and investment. Citizens have had to forego purchases of such as remodeling plans or the purchase of a home. Yet the governmental units of Illinois -- both state and local -- have grown dramatically.

Yes, we have heard about the number of school districts "operating in the red." But we have also seen some of these same districts (such as Palatine’s District 15) shower 25% per year salary increases upon highly paid teachers and administrators only to slough them off on the Teachers Retirement System with a hefty pension liability.

Now, we all know that many people testifying here today will complain that the state "isn't doing enough". This may be true. It may also be true that there are programs that deserve a greater level of funding than the state is currently giving them.

Frankly, as state legislators, the citizens of Illinois look to you not only to make the proper decisions as to which program gets funded, but also which featherbedded and over-funded bureaucracies deserve a haircut. By proposing a massive state tax increase and dressing it up with a "property tax relief" scheme that will rapidly be eaten up by continuing red ink, it is clear to most citizens that some people in the legislature are not willing to make the "tough decisions" that they were elected to make.

More and more Illinois citizens are becoming aware of this state of affairs, and they don't like it. That was the first message and I wanted to give you today.

The second message that I wanted to give to you today is that the solution to the state's budget problems is simple -- assuming that the goal was to enact good policy. But let's be honest here. Enacting good policy is often simple, but becomes complicated by the pressure of the spending lobby-- which we all know funds a great number of legislative campaigns. The simple solution is for the Illinois legislature to simply tell the spending lobby "NO!" Of course, I understand that this is politically difficult.

One of our goals at the Coalition for our Children's Future, as well as at FreedomWorks, is to provide grassroots support for legislators who have the political courage to stand up for the taxpayers of Illinois instead of the bureaucracies that are bankrupting the state.

If this forum allowed for more time, I could offer many details on how to reform the state budget. However, given that time is short, I will make only a few suggestions.

First, the area where Illinois can fix many of its budget problems lies in the reform of its Medicare and Medicaid programs. I suggest that each of you look to the research coming out of two excellent Illinois institutions. The Illinois Policy Institute and the Heartland Institute have excellent suggestions as to how Medicare and Medicaid can be reformed at the state level. Their plans show the promise of both reining in spending while improving the quality of the services the state provides.

Second, it is imperative to reform the Teachers Retirement System. The first step in this process is simple, in that the legislature simply need not renew the Early Retirement Option. This option has become one of the most egregious examples of the type of "shell games" the spending lobby plays with taxpayer dollars.

Another step in reforming the pension system would be to place it on solid actuarial footing. This may require increasing the portion that teachers must pay into the system. Converting the system from a “defined benefit” to a “defined contribution” plan may also solve the problem.

Third, the citizens of Illinois deserve honest and open spending disclosure at the state and local level. Many of the groups that are part of the Coalition for our Children's Future can testify about the difficulty of getting good information from their local governments -- particularly the school districts. This is unconscionable.

Each and every school district in the state should be required to place its budget online -- in a uniform fashion -- for every taxpayer to see – including account balances, and the sources and uses of each and every municipal dollar. At the federal level, accounting abuses created the passage of new regulations, yet at the local level, numerous abuses of taxpayer dollars occur regularly.

Lastly, but perhaps most importantly, the legislature should consider revising Title I so that state dollars that are currently going to extremely rich school districts be transferred to poorer districts.

Here is an example. Deerfield HS District 113 currently seems to hold the record for per pupil spending -- coming in at over $17,000 per pupil per year. Yet, this rich district -- which has a property tax base bringing in over $27 million -- receives over $5.2 million in state funds. The district containing Maywood, Melrose Park, and Broadview -- whose property tax base only brings in $11 million -- could certainly put that 5.2 million from Deerfield to good use.

In conclusion, I can only remind you that way back in the 1970s the lottery was supposed to fix our funding problem. Then we were told that a small income tax increase was supposed to fix the funding problem. In the mid-nineties were told once again that a small temporary income tax increase was going to fix the funding problem. When this temporary income tax increase was made permanent we were told that it would fix the funding problem. Next, we were told that the advent of gambling would solve the funding problem. Now, we are asked to believe that a massive 67% tax increase with a tax shifting scheme will fix our funding problem.

The citizens of Illinois are getting sick of it. The truth that you must hear; the truth that no member of the spending lobby will tell you; the truth that requires courage from our elected officials; is simple -- and it is increasingly obvious to the Illinois taxpayer.
There is no funding problem. There is a spending problem, and the solution is to cut spending.